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Business, 14.04.2020 15:48 sasalove

The variable cost of Part X is $50 per unit and the full cost of the part is $80 per unit. The part is produced in Portugal and transferred to a plant in the United States. Portugal has a 10% income tax rate. The United States has a 50% income tax rate and an import duty equal to 10% of the price of the item. Part X can be transferred at full cost or variable cost. Assume Part X is transferred at full cost. By using full cost instead of variable cost for the transfer price, the overall tax effect for the parent company is .

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The variable cost of Part X is $50 per unit and the full cost of the part is $80 per unit. The part...
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